Posted by on June 12, 2012

New York Mayor Michael Bloomberg has banned trans-fats, pressured companies to reduce salt, and mandated public calorie counts at restaurants. Last week, he announced plans to restrict soda sales to containers of 16 ounces or less. So, as I sat in my recliner chair yesterday, dressed in my tattered lounge pants slurping on my 64 ounce soft drink  (God love 7-Eleven) I pondered this ban.  Now since I am officially classified as obese  according to HHS (Department of Health and Human Services), I did not ponder as you might have thought, about the caloric intake or my  potential for diabetes or heart disease, but rather as an economist, I contemplated the effect on the economy this type of ban would have if instituted nationwide. Not that I was bored this Sunday!

As this blog implies, I did some secondary research on the subject and found that the average American (I have always wondered if I was considered typical –probably not, huh!) spent and consumed on carbonated beverages.  Well, it turns out that we spend individually $300 a year on carbonated beverages or $72 billion in turns of consumption; we consume over 140 gallons of pop a year. I then wanted to know how many people were involved directly and indirectly in the creation of this product. The beverage industry employs over 165 thousand. If you throw in the ancillary jobs (truckers, shelvers, cashiers, etc.) pop employs over 250k people. I then thought, wow, if pop does cause all these health problems I need to add in nurses, doctors, surgeons in to the mix.  Furthermore, these health providers are supported by staff so let’s add them in as well. While I am thinking about it, the more pop I drink the more obese I become so I need to buy new clothes so let’s add in these people. So now I was up to over 350k workers. It then dawned on me that we also needed to include the farmers who grow the corn (sugar comes from corn today, go figure!) and the distillers who transform the corn into sugar, and shazam, we now are at
400k workers. If I left anyone out, please accept my apology for I meant no slight to the importance of your job.

If I add the sales tax and income tax associated with the consumption and the employment, this amounts to $2.6 trillion dollars a year.  Cut that in half in support of Mayor Bloomberg’s ban, and we just increased our deficit annually by $1.3 trillion.

Now let’s add that ever forgotten “unintended consequences” affect, I might actually live longer and therefore, you have an increase drain on the Social Security system (and you thought you might actually be able to collect this) and while I don’t have diabetes or heart disease, I have a host of other maladies that drain the health care system. OMG – this is going to be a disaster!  Just by our stopping of sugary beverages by half, we could cause the USA to spiral into a Greece like crash (Do people in Greece drink pop? Hmmm, maybe that is the problem in Europe). This is an unmitigated economic catastrophe!  Please Mr. Bloomberg, reconsider this ban!  Oh-oh, I am out of pop. Got to stop and do my part in keeping the economy growing. Thank heavens we have the freedom of choice in this country and I can drink as much pop as I want without anyone telling me I can’t. Or am I dreaming?

by Richard Anderson, Business Program Chair

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